11/10/19

EUROPE: Clamping Down on US Tech Giants.

As published on luxtimes.lu, Monday October 7, 2019.

EU antitrust enforcer Margrethe Vestager will signal a further clampdown on US technology giants this month by imposing an interim order to force chipmaker Broadcom to cease alleged anti-competitive practices even before a full probe into its conduct ends.

In the first use of so-called “interim measures” in nearly two decades, the EU’s competition commissioner, who is set for a second term in the powerful role, will tell the US company to stop imposing terms on clients that stop them buying chips elsewhere. Brussels claims this is an abuse of dominant position.

Broadcom is expected to immediately appeal against the ruling and will fight all the way to the European Court of Justice, people with direct knowledge of the case said.

The company did not immediately respond to requests for comment but in the past it has said it follows competition rules and that the commission’s concerns lack “merit”. The commission declined to comment.

Vestager, who will have enhanced authority as executive vice-president of the commission, will begin a rare second, five-year term on 1 November, assuming she is confirmed at a hearing at the European Parliament on Tuesday.

She is expected to be grilled by MEPs on her new dual role as competition enforcer and digital policy supremo.

The use of interim orders suggests that the commission is preparing to be more aggressive in curtailing or preventing “irreparable harm to competition” by agile tech companies.

If it is upheld by the courts in the Broadcom case, EU regulators are expected to use this long-forgotten tool to go after big technology companies such as Google and Facebook following criticism that Brussels has been too slow to curb irreversible anti-competitive behaviour in a fast-moving digital market.

Established in EU law in 1980, interim measures have not been deployed since 2001, when thresholds were established for their use.

Vestager is keen on testing their effectiveness following a string of cases led by the French regulators in some local antitrust cases.

Alec Burnside, a Brussels-based competition lawyer at international law firm Dechert, said: “[Vestager] has the appetite for tougher enforcement because despite all of the work over the last five years there is the painful realisation that has not been sufficient to cause Google to change its ways.”

During her first term, Vestager fined Google more than €8 billion in three different cases. On Google AdSense, it took nearly seven years for the commission to impose a penalty after opening its investigation.

Burnside added: “The fines, although impressive in numbers, are no more than a cost of doing business just like delivery vans pick up parking tickets. It doesn't change the way they park.”

One Brussels-based antitrust lawyer called the move a “high-wire act” that would reinforce Vestager’s image as an “American companies basher” and could reignite tensions between the EU and Donald Trump, US president.

Trump has accused Vestager of hating his country “perhaps worse than any person I’ve ever met” following her fines against US companies such as Amazon, Google and Facebook.

The Dane is expected to get even tougher in her crackdown of powerful digital companies as she takes on a new beefed-up role, which will include a new mandate to draw up regulation, as well as enforcing it.